When faced with impending disciplinary action, many employees panic and believe they can avoid it by resigning with immediate effect. They believe they can elude the notice period they are required to serve when at resignation, thereby enabling them to avoid being subjected to a disciplinary hearing. The controversial finding by the Labour Court in the 2016 case of Mtati v KPMG Services (Pty) Ltd (2017) 38 ILJ 1362 (LC) supported this argument. However, on 14 June 2018, the Labour Appeal Court overturned this finding in the Coetzee v The Zeitz MOCAA Foundation Trust and others [2018] ZALCCT 20 case. The question that should therefore be asked is: can disciplinary action really be avoided by resignation with immediate effect?
Legal consequences of resigning with immediate effect
Firstly, employees and employers alike must understand the legal consequences of an employee resigning with immediate effect. It is an inherent feature of an indefinite employment contract that reasonable notice must be given to an employer when the employee decides to resign. This principle will apply when the notice period is therefore not expressly provided for in the employment contract. Notice given by an employee must also never be less than the prescribed notice period listed in section 37 of the Basic Conditions of Employment Act. Simply put this means that, termination of employment in the instance of a party to the contract may be terminated only on a notice of not less than: one week, if the employee has been employed for six months or less; two weeks, if the employee has been employed for more than six months but not more than one year; four weeks, if the employee has been employed for one year or more or, in the case of a farmworker or domestic worker, employed for more than six months.
If an employee therefore fails to work out the required notice period when he or she resigns (i.e. resigns with immediate effect) this failure constitutes a breach of contract. The employer has two remedies at his disposal. Firstly, the employer can opt to cancel the employment contract and claim damages from the employee for the breach. Alternatively, and of particular note for this discussion, is that the employer can also claim specific performance of the employment contract. This means that the employee will be required to serve the full time of their notice period.
What is the implication of my obligation to serve the full term of notice?
The general rule with regards to an employer claiming specific performance is that, if he or she is able to do so given the facts, the employer is entitled to enforce his contract (Thompson v Pullinger). This means that employers, who choose to oblige you to serve the full time of your notice, are entitled to do so, unless it is impossible.
If the employer opts to oblige the employee to serve the full time of their notice, a disciplinary hearing of that employee is still possible since that employee is technically still employed by the employer. Resigning with immediate effect will therefore be no deterrent to the institution of disciplinary action against the employee.
Cons of resigning with immediate effect to avoid disciplinary action
An employee who resigned with immediate effect, who was found guilty of misconduct and subsequently dismissed, might also be confronted with further dilemmas as a result of their choice. They attempted to resign before action against them was instituted. A Commissioner at the CCMA might therefore struggle to find grounds to award compensation, since the employee had resigned before the disciplinary hearing. The whole process of securing a remedy after dismissal might result in a waste of the employee’s time, money and effort.
What should I do?
We advise all employees who are facing disciplinary action to refrain from any rash actions. These actions especially include resigning with immediate effect to avoid the disciplinary inquiry. Resigning in no way guarantees that the employer cannot institute action against you if he or she so chooses. You therefore have nothing to gain but everything to lose by taking this course of action. When you are faced with impending disciplinary action, we advise you to rather contact a Labour Law specialist to expertly advise you of your rights. Should you have any queries, please contact us.